Data monetization as a source of funding for smart city projects

LinkNYC

Context

• Due to the prevalence of smart phones and mobile technology, New York's ageing and underutilised network of 8,400 public payphones became obsolete
• The New York City Department of Information Technology and Telecommunications (DoITT) in 2014 released a request for proposal to transform the city's payphone infrastructure

Problem

• The DoITT had ambitious plans to transform the city's payphones into smart kiosks, providing various public services at no cost to the government
• Developing and maintaining the smart kiosk infrastructure required high CAPEX investment and expertise

Innovation

• The LinkNYC project was awarded to the CityBridge consortium1 under a pubic private partnership (PPP) model
• The DoITT will provide CityBridge access to the payphone booths required for the project's infrastructure and create revenue by granting CityBridge rights to user data
• CityBridge will in turn invest USD 200M to develop and operate the smart kiosk infrastructure over 12 years, while generating revenues through user data and advertisements

Stakeholders Involved

• DoITT – Initiates and owns project while serving as a regulator for services provided by private partner
• CityBridge Consortium – Developer and operator of smart kiosk infrastructure

Results/Impact

• The Smart Kiosks have no cost to taxpayers and are expected to generate more than USD 500M in advertising revenue for New York City in the first 12 years of the project's operation
• By May 2019, 1,800 smart kiosks were built; the project appears to be on track to deliver around 7,500 kiosks by the end of 2023 (the converted payphones provide a suite of services1 e.g. free high-speed Wi-Fi, phone calls and device charging)
• As of March 2019, the LinkNYC network has more than 6M unique users who have used 8.6 terabytes of data collectively

Key lessons learnt

• While the data monetization revenue lever has yet to fully mature, it offers a novel approach to allowing private partners to monetize user data to fund smart- city projects — and generate revenue for the city
• To gain public acceptance for data monetization, project sponsors must have a robust approach to data privacy and seek to be as transparent as possible about how personal data will be used
• Governments should also ensure that all parties understand which kinds of data can be monetized by concessionaires; this will avoid the exploitation of especially controversial opportunities such as data from CCTV cameras